In addition to electric vehicles, how will lithium batteries change the status quo of energy?

Approximately three-quarters of a snake-shaped production line along the Nissan Sunderland plant, a worker is constantly installing fuel tanks on countless hacker chassis – most of the cars produced at the plant are this SUV. But this production line will go through another car from time to time: an electric car called Leaf.

At this point, the worker's task will change from installing the fuel tank to installing the battery. His movements work perfectly with the robotic arm next to him, seamlessly switching between fuel and electric cars.

Until recently, many people thought that this switch was incredible. In the past century, internal combustion engines have been the main driving force for cars and ships. This really gives it a big lead. Although the Leaf is known as the world's best-selling electric car, the Sunderland plant, the UK's largest car factory, produced only 175,000 Leaf last year, compared with 310,000 in the same year. In stark contrast, the hacker is in a profitable state, while the Leaf is losing money.

Last year, global electric vehicle sales were 750,000 units, less than 1% of the new car market. Carlos Ghosn, owner of the Renault-Nissan Alliance, said in 2011 that only the two companies will double their electric vehicle production by 2016. In hindsight, this prediction is obviously too optimistic, but similar predictions are not uncommon.

However, although the timing of the take-off of electric vehicles cannot be determined, it is a common consensus that this technology will soon become a big business.

Civilian electric vehicles with a range of nearly full range of petrol (such as Tesla's Model3 and General Motors' Chevrolet Bolt) have recently been listed, and the revised Leaf will be released in September. The current status of the Sunderland plant indicates that fuel and electric vehicles can already share a single production line, simplifying the popularity of such vehicles by expanding production capacity.

lithium power battery leap forward

Many projections suggest that the lifetime cost of owning and driving an electric car can be compared to a fuel car in a few years, which has led to a surge in electric vehicle sales in the 2020s and became mainstream in the 2030s. China contributed about half of the world's electric vehicle sales last year. It is estimated that 2 million electric and plug-in hybrids will be on the road in 2020, reaching 7 million in 10 years.

The consulting firm Bloomberg New Energy Finance pointed out that oil companies' expectations for electric vehicles are much higher than they were a few years ago. The Organization of Petroleum Exporting Countries (OPEC) now expects to drive 266 million electric vehicles on the road in 2040. Both the UK and France also said that by then, pure fuel vehicles will be banned.

This is due to the significant expansion of the lithium power battery business and the general consensus that the industry will continue to grow rapidly in the future. The first lithium power battery was launched 26 years ago and was originally used on Sony's CCD-TR1 camera. That product is so popular, and the battery it uses is even more so, and it is gradually used in computers, mobile phones, cordless devices, electronic cigarettes and other products.

The more electronic products that use batteries, the greater the demand for lithium batteries. Last year, the production of lithium batteries contributed by consumer products was about 45 GWh. To put it bluntly, if all the batteries are used to power the UK (the country's average power consumption is 34 GW), it can last for about 1 hour and 20 minutes.

In the same year, the production of lithium batteries for electric vehicles reached half of the electronics: 25 GWh. But SamJaffe, a battery consultancy at CairnERA, expects that demand for automotive batteries will surpass consumer electronics as early as next year, making it a turning point for the entire industry. The massive expansion has begun.

As the world's top five lithium power battery manufacturers, Japan's Panasonic, South Korea's LG Chem and Samsung SDI, China's BYD and Ningde era, are increasing capital expenditures, and expect production to reach three times the current level in 2020. It is estimated that Tesla's $5 billion super factory in Nevada and Panasonic has been able to achieve an annual production of about 4GWh. Tesla said the company will achieve 35 GWh of capacity in 2018. Just four years ago, this production was enough for all lithium batteries around the world.

Super factories are not just built for electric cars. After hearing about the power regulation in South Australia, Tesla founder Elon Musk told the country’s prime minister in March that Tesla could provide enough battery capacity by the end of the year to ensure that the grid never Goodbye.

In the super factory, they are currently trying to stuff 129MWh capacity to fulfill the boss's promise. When installed on the other side of the Pacific, it will be the largest of its kind in the world. But there will be many similar systems that will be deployed in the future.

As grid operators look for ways to smooth the effects of intermittent supply of solar and wind energy, industrial-scale lithium power battery packs are becoming more popular—especially by splicing many battery packs used in cars. Adjust its chemical and electronic components to support faster charge and discharge rates.

Consumers who want to be independent of the grid can buy smaller battery packs – or store their own electricity to sell to the grid when electricity prices are highest during the day or night. Batteries have become an integral part of the true vision of low emissions in the future.

Global production capacity soars

The basic principles of lithium batteries are easy to understand. When the battery is charged to a potential, lithium ions are pulled deep into the graphite electrode. During use, these lithium ions return to the more complex electrode, the cathode, made of a compound of lithium and other metals through the liquid electrolyte.

On the other hand, the basic operating model of the battery business is very opaque, mainly because suppliers pay too much attention to secrecy and the unpredictable economic situation of the Asian giants who are market leaders.

The situation in the past few years shows that all large manufacturers are increasing production capacity, in part because this can drive down unit costs. As a basic component of the battery, lithium batteries cost more than $1,000 per kWh in 2010 and fell to between $130 and $200 last year. GM said that when the company purchased a 60kWh battery pack for Bolt, the price paid to LG Chem was $145 per kWh (the cost of the battery pack was higher than the cost of the battery due to labor, materials and electronic components. ).

Tesla said that the price of the Model 3 battery is cheaper. Low cost is not the only improvement. A large amount of R&D investment has achieved higher energy density (increased capacity per kilogram) and greater durability (increased charge and discharge cycles). Bolt's battery warranty lasts for 8 years.

But in this way, price cuts can not only produce batteries that are cheaper and of better quality, but also lead to severe overcapacity. CairnERA estimated last year that lithium power battery capacity is one-third higher than demand. Both the agency and BNEF said that for every car battery produced, battery manufacturers either lose money or can only make a small profit.

Despite oversupply, they all plan to continue to expand, in part to further reduce costs. Jeff explained that this kind of thinking belongs to the "traditional Asian giant model": in exchange for profit margins in exchange for market share.

This seems to be a good strategy as the future of electric vehicles is bright. But now, it seems a bit nervous. Although Jeff believes that the growth in demand for electric vehicles and storage facilities can support this rapid expansion, he now also believes that "this is like a gold rush without gold."

But it does contain some other valuable metals. To produce more batteries, you need more lithium, as well as a variety of other metals, including cobalt used to make cathodes. These metals account for about 60% of the cost of batteries. For battery manufacturers, ensuring the continued supply of these materials is as important as mastering electrochemical technology.

Since 2015, Simon Moores of consulting firm BenchmarkMineralIntelligence has said that lithium prices have tripled, cobalt prices have doubled, and prices of nickel-containing chemicals used in cathodes have also risen.

Morse said it is not difficult to find a new source of lithium. The world's lithium reserves are at least 210 million tons, and the current annual output is only 180,000 tons. The new lithium mine is gradually being mined. Chile's SQM, the world's largest lithium producer, announced in July that it would invest $110 million in Western Australia to form a lithium joint venture.

The situation with cobalt is even more tricky. Not only is supply scarce, but many are from the Democratic Republic of the Congo. There are both ethical issues in this region (need to rely on child labor) and business problems (no one wants to rely on warlords for important resources). LG Chem has said that the company is trying to reduce the amount of cobalt used in the battery while continuing to improve performance. In the future, recycling this metal from used batteries will increase the sustainability of the entire industry.

One of the reasons why manufacturers are still confidently expanding their production capacity in the face of rising raw material prices is that lithium batteries currently have few rivals. There are often other battery technologies that claim to have a greater advantage in principle - but no technology can change from a simple idea to a dominant technology, like a lithium power battery, through decades of development. The entire process has spawned a number of complementary technologies, including fine manufacturing, electrolyte selection and even more complex metal cathode nanotechnology.

Kenan Sahin, head of CACMPower, a supplier of cathode materials in the United States, said that the cost and weight of lithium batteries, the number of cycles of repeated charge and discharge, durability and safety are all achieved through countless adjustments, not overnight. Do it.

He compares battery chemistry to the drug discovery process in the pharmaceutical industry. “It’s really hard. No matter what you want to do on a scale, you have to accept the side effects,” he said. This is difficult for potential creditors to imitate. For the foreseeable future, the ever-evolving lithium power battery technology—possibly using new solid-state electrodes—will continue to lead and continue to benefit from the continued growth in the application models it supports.

Until now, the most mainstream is the cylindrical 18650 battery. It is about 65 mm long and 18 mm in diameter, and has an energy density of about 250 Wh per kilogram. (As a comparison, the energy density of gasoline is about 50 times higher, but the battery can store hundreds of times more energy.)

Tesla and Panasonic are currently developing 2170 batteries, which are slightly longer and slightly wider than the 18650. According to Musk, this will be the highest density battery on the market. The company said that the driving cost of the Model3 delivered at the end of July was down by half compared to any previous model. At the launch of the car, Musk’s statement about achieving 500,000 units next year is quite awesome. "Welcome to the production of hell," he said to the assembly line workers.

Tesla announced on August 7 that it would issue $1.5 billion worth of bonds to support the company's expansion plans, giving the stock market a much-needed breathing space – the company often raises its stock market and its share price has been in the past year. Two-thirds higher.

The company has said that they have received 455,000 Model3 pre-sale orders, which can generate enough cash flow before the end of the year to consolidate its financial position. If everything goes according to plan, Musk hopes that the super factory will become the largest building in the world with an annual capacity of 100 GWh. The company may also build super factories elsewhere, and the next one may settle in China.

All initiatives believe that electric vehicles will prosper. These products are undoubtedly getting better and cheaper. But there are still some factors that constrain its practicality, the most remarkable being charging. In the UK, 43% of car owners do not have on-street parking, so they cannot charge their cars at home. When the 11kW charger is used to charge a 90kWh battery for 6 hours, it is possible to blow the fuse.

New York's power grid has fallen into disrepair, dating back to the era of George Westinghouse and Nikola Tesla more than a century ago. Efforts are currently being made to absorb more renewable energy sources as a source of electricity, and energy storage facilities offer new ways to cope with peak demand for electricity. The state's energy official, Jason Doling, said the project was ideally suited for installation in high-rise buildings, which could power the elevator during the morning and evening hours.

But the New York fire department is still worried that lithium batteries in buildings may cause fires. Last year's Samsung Galaxy Note7 "Frozen Door" made the world realize that lithium batteries, if not properly designed, would burn because of a short circuit. But overall, the new materials and ceramic coatings used on the electrodes have made car batteries very safe.

In addition to security concerns, companies that install their own storage systems say that outdated regulatory and insurance issues pose an obstacle to them. Anil Srivastava, head of Swiss battery manufacturer Leclanché, said that this limits their ability to access funds. They also need to find ways to make storage facilities worthwhile.

Sometimes, this is almost the only solution that meets regulatory requirements (as is the case in San Diego): After the leak of AlisoCanyon's gas tank in 2015, the California Public Utilities Commission was worried about a blackout in Los Angeles. When price is the primary goal, the battery is looking for more than one service to offer to the user. This process is called "revenue stacking." For example, a system can not only power the grid for short-term frequency adjustment, but also be a way to cope with peak demand.

It sounds complicated, but finding more than one way to sell the same thing is an inevitable trend in the battery industry, just as it customizes different products for different markets and different scales of use. Although today's prosperity looks a bit daunting, in the long run, the industry seems to be doing a good job.

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